Author Topic: In Canada: Line of Credit for Down Payment Question  (Read 804 times)

Sweet Surrender

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In Canada: Line of Credit for Down Payment Question
« on: October 29, 2018, 07:45:44 AM »
Hi All, I have a quick question: If I used my line of credit at a Canadian Bank for a down payment on a revenue property can I write off the interest on the line of credit? Or does it have to be an official mortgage? 
If it has to be a mortgage, and I remortgaged my person residence (which is just shy of being paid off) in order to come up the money for the down payment for a new revenue property, could I write off the interest on the personal mortgage (the portion that is the revenue property down payment)?
I am wanting to be able to write off the interest.
I understand the Line of Credit interest rate will be higher and that there are pros and cons to each choice. The question right now is simply the accounting one re:writing off the interest.
Thanks for any insight!

lollipop_hurricane

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Re: In Canada: Line of Credit for Down Payment Question
« Reply #1 on: October 31, 2018, 03:14:16 PM »
ptf

Goldielocks

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Re: In Canada: Line of Credit for Down Payment Question
« Reply #2 on: October 31, 2018, 03:27:16 PM »
Yes, all loans taken out in order to invest * are tax deductible.

* you do need to have that investment generate income each year, not just "a hold for 10 years to get a capital gain" plan.  So you can't just buy land and sit on it and claim the borrowing costs, you have to receive rent or other income from it.

You can't claim your primary residence mortgage as tax deductible, it gets preferential treatment of no-tax on the gains when you sell instead.

 

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